PNC Subpoenaed Over Purported Mortgage Fraud

By Bianca Brodaric | 8 March 2014

PNC Financial Services Group Inc. (NYSE: PNC) has been subpoenaed by the U.S. Department of Justice regarding its business ties with payment processing merchants. This was confirmed by the Pittsburgh, Pa.-based financial institution through a regulatory filing earlier this week.

PNC is currently being grilled by federal agencies as part of a broader series of mortgage investigations, and, according to its new filing, the DOJ had asked the institution regarding details on the “return rate” for “merchant and payment processor customers with whom PNC has a depository relationship.” The bank said that it believes the subpoena was issued to “determine whether, and to what extent PNC may have facilitated fraud committed by third parties against consumers.”

Federal regulators, including, but not limited to the DOJ, have been investigating how banks play a part in facilitating payment processing services to enterprises that have, in turn, been accused of charging consumers for debt relief programs. These charges have spurred on a series of fraud complaints which are presently being investigated on.

Separately, PNC said this week that it is working closely with federal agencies to settle mortgage-related cases. The institution said that it has received three federal subpoenas, including two from the Southern District of New York’s U.S. Attorney’s office. The two latter subpoenas are in connection with supposedly fraudulent lending practices carried out by National City Bank, which was bought out by PNC six years ago.

The first subpoena seeks to obtain details on claims for costs incurred upon foreclosing on Fannie Mae, Freddie Mac, and FHA-guaranteed or insured mortgages.